‘Pervasive’ scams

Probe by insurance company finds auto body shop scams

Workers at auto body shops deliberately damaged cars, installed used parts but billed for new ones, or invoiced for phantom repairs, according to an investigation by a Canadian insurer that is calling on government to help in curbing the problem.

Aviva Canada found about half the total expenses submitted for repairs to crashed vehicles during its investigation in Ontario were bogus — an amount the company estimates adds up to hundreds of millions of dollars a year.

“Nobody has ever really sampled the extent of fraud with any kind of accuracy,” Gordon Rasbach, Aviva Canada's vice president of fraud management, said in an interview. “This is the first time in Canada that we’re aware of that anyone has actually taken a sample, albeit a small one, at random, and used actual cases in progress to put some kind of numbers on it.”

In its investigation — results are to be released on Monday — Aviva attempted to simulate typical fender-bender situations involving private passenger cars by deliberately crashing 10 vehicles.

The company had experts detail the damage and estimate repair costs, then kitted out the cars with hidden cameras and, at various times last year, put them on highways in the Toronto area. Investigators posed as hapless drivers just having gone through their first crash.

Rasbach said he was surprised only one repair outfit acted honestly. The other nine cases showed some degree of “clear cut” fraud, he said. While Aviva’s experts had estimated total damage for the 10 vehicles at about $30,000, the repair shops invoiced Aviva for about $61,000, the company says.

Among other things Aviva says occurred were tow-truck drivers who billed for towing and storage that didn’t happen, drivers who were asked to sign blank work orders, cars maliciously damaged at body shops, and shenanigans over repaired or replaced parts.